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kazakhstan

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  KAZAKSTAN

REPUBLICAN REFERENCE

Area (sq.km)
2,717,300

Population
16,763,000

Principal
ethnic groups

Kazaks 44.3%
Russians 35.8%
Ukrainians 5.1%
Germans 3.6%
and many others

Capital
Astana
(formerly Akmola)

Currency
Tenge

President
Nursultan Nazarbayev

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Background:
Native Kazaks, a mix of Turkic and Mongol nomadic tribes who migrated into the region in the 13th century, were rarely united as a single nation. The area was conquered by Russia in the 18th century and Kazakstan became a Soviet Republic in 1936. During the 1950s and 1960s agricultural "Virgin Lands" program, Soviet citizens were encouraged to help cultivate Kazakstan's northern pastures. This influx of immigrants (mostly Russians, but also some other deported nationalities) skewed the ethnic mixture and enabled non-Kazaks to outnumber natives. Independence has caused many of these newcomers to emigrate. Current issues include: developing a cohesive national identity; expanding the development of the country's vast energy resources and exporting them to world markets; and continuing to strengthen relations with neighbouring states and other foreign powers.

Update No: 253

The world crisis has helped all the Central Asian states by putting them on the map again. One of them is certainly Kazakstan.
It is not so much in military terms that it should benefit as in economic ones, being an increasingly important provider of energy to the world market. A huge offshore find was made in summer last year in the Caspian Sea, just west of the Kazaks' northernmost shore. The field at Kashagan contains 10-40bn barrels, it is estimated, the biggest discovery since the North Sea was prospected in the late 1960s.
There is also the huge Tengiz field onshore, which is being developed by Chevron. Between them the two fields should ensure Kazakstan becoming a major player on the world's energy industry.
The republic has enormous resources and now a real prospect of emulating Russia's example by becoming a major exporter of oil. On October 15th a great event took place. The first oil was loaded onto a new pipeline, the first to take their Caspian Sea oil to Western markets. The US$2.5bn project to build the pipeline was implemented by the Caspian Pipeline Consortium (CPC) owned by various Russian and Kazak bodies, plus ChevronTexaco and Shell. The eventual capacity will be 67m tonnes of oil per year, more than one million barrels per day. The huge Kashagan field (with 10-40bn barrels of reserves), expected to be operating by 2003, will be a beneficiary.
Kazakstan is to receive US$52m as a result of its cooperation in the anti-terrorism struggle. It does not really need it these days. Its economy is now growing at over 10% per year.
The Kazaks could become a major producer of virtually every metal and mineral sold on world markets. With a population of only 16m, they could come to resemble Australia after decades of development. Of course there is a long way to go, not least to get their product to distant markets. 
Recent developments have been encouraging. Production in industry, including mining and energy, has been rising in double figure percentages, the fastest growth in the CIS (12% for GDP expected for this year).
President Nursultan Nazabayev runs a tight regime and looks very securely in place. He travels the world stage without fear of being toppled. He has courted the well-educated local Russian population with some success. Fewer are leaving; they want to be around when the money really starts rolling in. With the world economy in recession that may not be for a few years yet.

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ENERGY

Kazakstan to sell 100 fields on oil-rich Caspian Sea shelf


Kazakstan is putting up for sale 100 fields potentially containing oil near the giant Kashagan oil deposit. It is expected that the fields will be immediately bought by foreign companies, who have already achieved good results in drilling wells in this area, Kazak Commercial Television has reported.
However, it should be noted that the government was forced to sell these fields. Kazakstan wanted to sell oil deposits in the southern part of its Caspian shelf, but so far this has been impossible because of the dragged-out process of defining the legal status of the Caspian Sea.
Kazakstan is now selling the fields the ownership of which has already been agreed with its northern neighbour, Russia.

Kazak oil firms on Caspian to lease British-made icebreaker

Kazakstan is to get its first icebreaker. The vessel has been ordered by oil companies operating in the country to make the transportation of cargoes to drilling platforms on the Caspian Sea easier, Kazak Commercial Television has reported.
The terms of this contract have been kept secret so far, but it has emerged that Kazakstan will get a British-made icebreaker, which has already been in use. Kazakstan will lease it for 10 years. It is a £35m contract.
Workers in the oil industry hope to cut transportation costs by using this vessel instead of the aircraft that they previously used to transport personnel and foodstuffs to drilling platforms surrounded by ice.

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FOREIGN LOANS

US$15m credit for water - World Bank


The World Bank has allocated to Kazakstan an interest-free credit worth US$15m, Special Representative of the World Bank at the UN, Eduardo Dorian, told Kyrgyz Permanent Representative in the UN, Kamil Bayalivov, according to the BBC.
The credit will be used for a project to supply the republic's rural areas with clean drinking water and to improve the sanitary condition of water pipelines in villages.
Dorian said that the project would target most villages of eastern Issyk-Kul, central Naryn and western Talas regions, giving them access to purified drinking water through new water supply systems. The credit is allocated by the International Development Association under the World Bank for 40 years with a 10-year grace period.

USA to allocate US$200m to eliminate Kazak nuclear arsenal

In 2002, the USA intends to considerably increase financing of projects for the final elimination of the nuclear arsenal in Kazakstan, Almaty reported recently. According to a White House statement, America is committed to eliminating weapons of mass destruction and will finish this matter. On President George Bush's personal instructions, Kazakstan will be allocated several hundred million dollars (according to the news headlines, US$200m) to implement five antinuclear programmes. The experts link the American initiative with the White House's intention to improve the peacekeeping image of their country after the USA opted out of the ABM treaty.

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INDUSTRY

New tobacco factory launched in southern Kazakstan


The Standart-Production US-Kazak joint venture has launched a new tobacco production line in South Kazakstan Region.
The joint venture's production director, Arslan Gadzhiyev, told an Interfax-Kazakstan News Agency correspondent that the plant would reach its designed capacity of 12m packs of cigarettes without filter worth not less than 120m tenge (the current rate is 150.2 tenge to the dollar) [approximately US$800,000] this summer.
He said that the production was based on local tobacco that is why the cost of one pack is comparatively low - 10 tenge. Gadzhiyev said that the production line in South Kazakstan Region had been set up on the base of an abandoned farm and that Russian equipment was used there.
He said that the American side had invested US$200,000 in the project since November last year, and it was planning to invest another US$500,000 in accordance with the business-plan drawn up by the Kazak side...

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MINERALS & METALS

British company to sell Kazak copper on world market


Kazakstan's major copper producer, the Kazakmys Corporation, will sell its output on world markets through a British company, the Interfax-Kazakstan News Agency reported recently.
"The Kazakmys Corporation open-type joint-stock company will now sell its products on the world market through the British company Apro Ltd., not through its major shareholder, the South Korean Samsung, as it did before," Vladislav Nikolayev, spokesman for Kazakmys, told the news agency.
He also said that this decision had been taken at a special meeting of shareholders on 21st December.
Kazakmys will sell all its copper through Apro Ltd., which has been set up by a group of trade companies, including Samsung, in London, Nikolayev said. "Apro's commission for selling Kazak copper is lower than Samsung's," he noted.
Nikolayev also told Interfax-Kazakstan that the shareholders meeting had expanded Kazakmys's board of directors from 10 to 12 members. Kazakmys produced 381,700 tonnes of refined copper in January-November 2001, 5.6 per cent up on 2000.

Major Kazak zinc producer to invest US$15m to upgrade its power complex

Kazakstan's major zinc producer, the Kaztsink joint-stock company, is planning to invest about US$15m in its power generating stations in eastern Kazakstan, the Interfax-Kazakstan News Agency has reported.
Kaztsink is planning to modernise the Bukhtarma hydroelectric power complex between 1998 and 2005, the company's press service told the agency. In particular, the funds will be spent to replace main transformers, radial-axial working wheels of hydraulic turbines and other facilities, the press service said. The capacity of every hydraulic turbine will increase by 25-30m kWh a year, it added.
The Bukhtarma hydroelectric power complex generated 2,066m kWh of electricity in January-October 2001, Interfax-Kazakstan added.

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TRANSPORT

Underground investment for Almaty


The construction of the underground transport system in Almaty will possibly be financed by the republican Reserve Fund Akim of Almaty city, Viktor Khrapunov, stated recently, reports New Europe. 
According to Khrapunov, the recent terrorist acts in the USA on September 11th and the deficit of free finances, directed towards restoration of the economy of the US, were the key factors accounting for the fact that finding potential investors to complete the construction had become more difficult. Consequently, he stated, should the Akim administration not find investors in 2002, the construction of the underground will be financed from the republican budget in 2003.

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